Harare- Not yet two months after President Robert Mugabe's government slashed 10 zeroes off the country's plunging currency, Zimbabwe has introduced new

10,000 and 20,000 Zimbabwe dollar notes as the new money goes the way of the old.

The state-controlled Herald newspaper said Monday that the two new bigger notes would be brought into circulation immediately.

This is the second set of new notes introduced since August, when the Reserve Bank, in one fell swoop, lobbed 10 zeroes off the dollar, transforming 10 billion Zimbabwe dollars into one Zimbabwe dollar. At that time, the biggest note was 500 dollars.

Zimbabwe has the world's highest inflation, estimated at about 40 million per cent. The currency has plummeted to a billionth of its value since the beginning of the year. Mugabe's bankrupt regime is known for simply printing money when it runs out of cash.

The new 20,000 Zimbabwe dollar will only buy two packets of cigarettes, but is also the equivalent of two months' pay for a police constable.

One US dollar exchanged for cash on the black market is now worth 1,000 Zimbabwe dollars, but will get 100,000 Zimbabwe dollars if exchanged by bank transfer.

The country has a chronic shortage of cash because the bank cannot print Zimbabwe dollars fast enough to keep up with inflation and because a German company that had supplied the country with bank note paper for decades, stopped dealing with Zimbabwe a few months ago under pressure from the German government.

The slide in the country's currency was checked immediately, even strengthening for a few days, after Mugabe signed a power-sharing agreement with pro-democracy leader Morgan Tsvangirai two weeks ago.

But it resumed its downward course when the two leaders failed to agree on the sharing of government ministries. (dpa)